Geneva (AP) – Trade in manufactured goods was the most dynamic feature of global commerce last year, expanding in real terms by 7 percent, according to the the World Trade Organization's (WTO) annual trade report released Thursday.
The trade in fuels and mining products increased by only 2.5 percent, but their high prices ensured big returns for exporting countries, the report said. Farm goods trade fared somewhere in between, increasing by 5.5 percent.
Trade in manufactured goods grew slower than in 2004, however, when they jumped by 10 percent. Fuels and metals trading also slowed from a 3.5 percent increase the previous year, but agricultural commerce’s growth rate accelerated from 3.5 percent.
Overall, global goods trade increased by 6 percent last year, slower than the 9 percent achieved in 2004, the WTO said. To avoid distortions from currency fluctuations, the body gives changes in volume or “real” teams each year by using a complicated formula to measure the actual change in how many goods are traded.
It attributed the slowdown to what the World Bank estimates was a deceleration in global GDP growth to 3.6 percent in 2005, from 4.1 percent in 2004.
The export of fuel was the most impressive gainer in dollar terms, rising by 41 percent to $1.4 trillion in 2005, a 13.8 percent share of global – its highest level in almost two decades.
As a result, Russia, Saudi Arabia, Iran, Venezuela, Algeria, Kuwait and Nigeria all boosted their exports in dollar terms by at least 30 percent, the 110-page report said.
The WTO said the oil and gas prices also stimulated big gains in the share of world trade held by the Middle East, Africa, Latin America and the former countries of the Soviet Union. It noted that the U.S. trade deficit, by contrast, soared to $793 billion, roughly 8 percent of world merchandise exports.
Among major traders of manufactured goods, China's export growth rate of 28 percent stood out last year, the Geneva-based trade referee said. Iron, steel and chemicals all performed better than average in dollar terms, while automotive products, clothing and textiles were below average.
The best growth rates for commercial services traders were China, India, Luxembourg, Russia, Poland, Mexico, Brazil and Hungary, who all had at least a 15 percent increase, according to the report.
WTO Director-General Pascal Lamy said the global slowdown in economic activity and commerce from two years ago highlights the need for ''a strong, rules-based multilateral trading system,'' which he said was essential to keep the global economy ticking even when production lags.
In July, five years of global free trade talks were suspended as differences between rich countries like the United States, Japan and the 25-nation European Union clashed with poorer nations and emerging economies over reductions in barriers to farm and manufactured trade.
Lamy has been trying to convince countries to restart the negotiations, but there has been no indication so far that the organization's 149 members have budged in their positions.
''The lingering indecisiveness of the Doha round further saps the confidence in the multilateral trading system as an engine of economic growth and development,'' Lamy said. ''It's time for political action to bring the round to a successful conclusion.''